Since rates for conventional mortgages are skyrocketing, jumbo loans are starting to look more appealing to potential borrowers, an article in Bloomberg reported.
Jumbo originations climbed 15% to $54 billion in the first quarter from a year earlier and are on track to reach $220 billion in 2013: the highest level since 2007.
Additionally, the article explains that banks have a higher incentive to snag jumbo borrowers because the amount of refinancing is slowly dwindling.
"Lately, our jumbos are either in line with conforming or better," said Karen Mayfield, the mortgage banking national sales manager at BNP Paribas SA’s San Francisco-based Bank of the West unit. "Slowly but surely, the gap has closed in the past six months, and it’s really become much more obvious in the market over the past 30 days."